Green card holders actually leaving the United States
Green card holders abroad whom the IRS no longer considers U.S. Persons
|c. 15,000 per year?
Fewer than four thousand Form 8833 filers
Around ten thousand ex-LPR deportees
As Patrick Martin, Phil Hodgen, and others have pointed out, if you previously immigrated to the U.S. as a legal permanent resident (LPR, “green card holder”), the IRS considers you a U.S. Person for tax and asset-reporting purposes even if you’ve left the country. Per 26 USC § 7701(b)(6), the only way this changes is if you either take a treaty-based return position that you are a resident of another country, or get a determination from USCIS or a court that your LPR status is gone. You usually do the former by filing IRS Form 8833. You usually get the latter by filing USCIS Form I-407 or by being deported.
Absent that, you remain a “U.S. Person” even if your green card expires or you’ve been out of the country so long that it’s clear you’ve abandoned your residence in the United States. In other words, you are a resident of the U.S. for tax purposes, but not for residence purposes. How many people are stuck in this tax limbo? The Department of Homeland Security estimates that more than 1.3 million LPRs moved out of the U.S. from 2005 to 2012. Generously speaking, perhaps six hundred thousand took action during that period to retain their green cards by applying for re-entry permits from USCIS (whether or not they knew about the tax consequences of keeping their LPR status). Another 115,000 actually filed Form I-407 to cancel their green cards; there appear to be a similar number of Form 8833 filers and deportees.
That leaves possibly as many as half a million emigrants who no longer have any right of residence in the U.S. but remain subject to that country’s worldwide “citizenship-based taxation” net.
Sources of data and limitations
The statistics on I-407 filers come from a Freedom of Information Act request by Shadow Raider, which has received far less attention than it deserves; I am glad to see that professionals like Virginia La Torre Jeker are starting to make use of this interesting data.
For Form 8833, the IRS estimated in Paperwork Reduction Act filings that they receive about four thousand 8833s per year; most filers are likely to be dual-resident corporations rather than individuals, but even if they’re all LPRs, it doesn’t change this post’s conclusions that much. (It is theoretically possible to take a treaty-based return position without filing Form 8833, and indeed some such positions are explicitly exempted from Form 8833 filing, but I cannot find statistics on how many people do that, or how many of those positions would result in deemed abandonment of U.S. residence.)
Deportations appear to be of a similar order of magnitude as I-407 filings; DHS’s published statistics on deportations aren’t broken down by immigration status of deportees, but from the (outdated, second-hand) statistics I was able to find, about six thousand to ten thousand LPRs get deported each year.
I haven’t tried counting the more obscure ways of losing a green card, namely “reversion” (usually when a green card holder wants to take a diplomatic job and not waive immunity) or “rescission” (cancellation of adjustment of status, when a person in non-immigrant status obtained a green card for which they weren’t eligible).
LPRs abroad who want to keep their green cards?
Not all LPRs abroad automatically lose their LPR status; many take action to keep it. Some of them might think the tax & asset-reporting requirements are an acceptable price to pay for “insurance” (though I’d expect most of the people with this attitude would have just gone ahead and naturalised in the U.S. before moving back to their home country). The rest are blissfully ignorant of FBAR, Form 8621, and all that mess. It is difficult but possible to slip through the net and maintain a valid green card without being resident in the U.S.; some LPRs on webforums tell stories about living abroad for years while making numerous short visits to the U.S. to try to keep their green cards.
One possible indicator is the number of people who file Form I-131 to apply for a re-entry permit, which may allow an LPR to go back to the U.S. after an absence of up to two years. However, it’s difficult to interpret the Paperwork Reduction Act filings for this form, because it’s used for other purposes too, including by non-LPRs applying for advance parole. In particular, the number of I-131 filers has increased drastically since mid-2012 due to Deferred Action for Childhood Arrivals beneficiaries seeking to travel outside of the U.S.; by definition, none of them would be LPRs.
Fortunately, USCIS’ statistical reports divide I-131 filings into two categories, one for “advance parole” and one for “travel documents”. In their report for the fourth quarter of Fiscal Year 2012, USCIS says they received 86,661 I-131s applying for travel documents that year. Many of those applicants would have been refugees (unable to get passports from their countries of citizenship) taking short trips abroad, rather than LPRs seeking re-entry permits, but without any further breakdown from USCIS it’s impossible to say how many, so let’s just assume that all of them are LPRs intending to live abroad.
So as a back-of-the-envelope figure, we can say that at most six hundred thousand of the green card holders who moved out of the U.S. between 2005 and 2012 took action to keep their green cards, and the other seven-hundred-thousand-plus didn’t. Among the latter group, only a bit more than two hundred thousand had their green cards cancelled formally, leaving around five hundred thousand immigrants-turned-emigrants who took no action to keep their green cards but are still considered U.S. Persons by the IRS.
That headline number of half a milion depends heavily on the estimated rate of emigration, so it’s worth looking into those figures more carefully.
Each year, Michael Hoefer and Nancy Rytina (and previously, Bryan C. Baker) of the Department of Homeland Security publish an estimate of the population of U.S. residents without legal visa status (in popular parlance called “illegal immigrants”, even though many of them have no intention to remain permanently). DHS calculates this number as a residual: take the American Community Survey’s estimate of the total foreign-born population of the United States, subtract out the known population of non-immigrants with valid visas and the estimated population of immigrants, refugees, and asylees (whether naturalised or not), and everyone else left over should be an unauthorised resident.
The figure for the population of immigrants, refugees, and asylees is itself an estimate: DHS takes 1980 as a base year, adds known grants of green cards & refugee or asylee status from each year since then, and subtracts estimates of people dying or leaving the country. (They don’t subtract out naturalisations, since they presume that naturalised citizens remain in the country and thus get counted as part of the foreign-born population by the above-mentioned ACS.) This means that DHS has to estimate emigration among green card holders, refugees, and asylees for each year. As they described their methodology in 2007:
Emigration is a major component of immigrant population change. In the absence of data that directly measure emigration from the United States, researchers have developed indirect estimates based largely on Census data. For this report, annual emigration rates by year of entry (year of naturalization if the immigrant subsequently became a U.S. citizen) were calculated from estimates of emigration of the foreign-born population based on 1980 and 1990 Census data (Ahmed and Robinson, 1994). In addition, refugees and asylees, with little likelihood of returning to their country of origin, were assumed not to emigrate.
Previous DHS unauthorized population estimates for 2005 and 2006 assumed separate emigration rates by age and region of birth (Asia versus other) and a rate for refugees and asylees equal to one half that of other LPRs. The overall effective rate of emigration for legally resident immigrants in 2007 was about the same as the rate for the 2006 and 2005 estimates — 21 percent after twenty years. The primary compositional impact of the revision in method for 2007 was a decline of approximately 30 percent in the unauthorized population from Vietnam (resulting from an increase in the legally resident population).
In 2009 they raised their estimate of the twenty-year emigration rate to 22%, then lowered it back to 21% in 2010, and further to 19% in 2011. In 2006 they also gave an estimate of the 10-year emigration rate as 15%; in other words, they assume that your likelihood of emigration decreases the longer you hold a green card.
Very roughly speaking, this suggests that maybe a third of the emigrants in any given year had held their green cards for six years or more, the crucial length of time for exit tax purposes (“eight out of the last 15 calendar years”) — though of course, even those who emigrated before then will eventually hit the exit tax time threshold if they don’t properly file Form I-407 or otherwise get out of U.S. Person status.
Further reading on U.S. emigration
The DHS cites Bashir Ahmed & J. Gregory Robinson (1994), “Estimates of Emigration of the Foreign-Born Population: 1980-1990”, Technical Working Paper No. 9, U.S. Bureau of the Census. The Census Bureau also revisited this topic in a brief section in a more recent paper: Frederick W. Hollmann, Tammany J. Mulder & Jeffrey E. Kallan (January 2000), “Methodology and Assumptions for the Population Projections of the United States: 1999 to 2100”, Population Division Working Paper No. 38, Bureau of the Census: Washington, D.C.; in that paper, they estimated that 230,000 foreign-born and 48,000 native-born people emigrated from the U.S. in 1998.
If you’re looking for a shorter read, see the section on emigration (starting at page 269) in the 2000 Statistical Yearbook of the Immigration and Naturalization Service. It gives all sorts of additional statistics (including estimates of emigration all the way back to the beginning of the 20th century and of the top 10 destination countries for American emigrants), along with little factoids like the last year the U.S. collected actual emigration statistics rather than estimates (1957).
Finally, there’s a paper cited by the INS: Robert Warren & Ellen Percy Kraly (1985), The Elusive Exodus: Emigration from the United States, Population Trends and Public Policy Occasional Paper No. 8, March, Population Reference Bureau: Washington, D.C.; this is the source of the historical emigration estimates in the INS yearbook. The full version is not available online; check WorldCat to see if your local library might have a copy. The abstract is available courtesy of PopLine:
Sufficient information is available to determine that during the 20th century the US gained about 30 million immigrants and lost approximately 10 million people to emigration. Currently, more than 150,000 people, mostly former immigrants, leave each year. A close look at emigration trends alters the perception of the impact immigration has on US society. The facts appear to contradict the notion that everyone wants to move to the US but no one wants to leave. Some portion of the immigrant population evenutally departs. A relatively new phenomenon over the past few decades is that US citizens also are emigrating in increasing numbers. This review and compilation of emigration statistics covers the relationship between immigration and emigration, the emigration of US citizens, and public policy and statistical implications.
And how many I-407 forms ended up in a black hole at the USCIS or was mine one in a million? 🙁
Another way to use this data is to throw it back at all the anti-renunciation articles.
(All of those terrible ex patriots and blah blah blah)
THe only difference between those in the statistics and Saverin is that Saverin made the mistake of acquiring the Mark of the Beast.
@Eric: Thank you for the fine analysis of ex-immigrants and their failure to properly return their green cards. I’ve spent some time searching for and reading US emigration research and realized that much of it involves estimates based on estimates.
Several months ago I decided to do some original research following a discussion with a married couple in the US that there had been “a lot of people who left the country from their high school”. They came back to me with a detailed list of US emigrants who had graduated from their small high school. This is the information they provided:
Graduation period: 1968 to 1978
Number of emigrants known to them: 7
Number of high school graduates during this period: 550 (estimate)
Calculated emigration rate: 1.3%
Where did these people emigrate to:
When did they emigrate: “within a few years of finishing college”
Why did they emigrate (their opinions):
Political: 1 or 2
Studies/ Job: 2 or 3
Love: 1 or 2
Get as far away as possible: 1 or 2
High school only: 1
Four years college or more: 6 (2 with doctorates)
Ethnicity of high school: approx. 100% white
1) They estimated that they “knew” what happened to 50% to 75% of the graduates in these 11 years but thought that they would have “heard” if others had emigrated.
2) They were aware of “several younger people” who had emigrated but did not have an overview.
3) They could not understand why anyone would emigrate to Germany in view of WW II. (!)
4) One small high school’s emigration over 11 years is not representative of emigration from the US and an extrapolation would not be advisable.
If we look into the future FATCA will become basically one website that FFIs will update in real time.
When the USG finally forces FFIs to do the search the other way around, for example, search for those ‘green card holders’ or US passport holders with foreign birthplace, these people will be uncovered.
If the IRS wants to get Mr John Smith they may struggle, but how about Mr John Smith born on 31 December 1959? It’ll get back far fewer hits.
The IRS will the FFIs do all the data-mining as well in future on top of their other obligations.
So green card holders watch out – you’ll be in the FATCA net soon.
That’s why the Charter Challenges needs Canadian Courts to write the rules of the road for FATCA not the United States Government.
*So green card holders watch out – you’ll be in the FATCA net soon*
We will be scooped up just like everyone… we did things no one thought would be an issue… kept banking in home country so a mortgage & other expenses such as taxes can be paid by transferring funds into the account from the US, have a US addy, or US phone number on our legally owned & taxed already things … I know some people who had their mortgages called & they are scrambling or shut out from banking & investments in their home country… I equated GC as a legal visitors pass… I pay taxes in the US for all I made in the US… We are not citizens of the US… Crap that was owned for many generations… the US seems to think we owe it to them… If we knew about this… my family would have never set foot in the US… don’t get me wrong… we made a good living in the US… paid taxes on it… but now we are being treated as fake citizens… all the penalities to be paid… but no vote or representation…. To add salt to the wound… our own home country is helping them… even though we pay taxes in our home country also… but homelanders seems to think we live the good life & pay no taxes to anyone…
@EmBee. Us too. My wife’s I-407 was sent to the US consulate 2 years ago. Not a word.
Up until now I thought I was the only one. Now it looks like your wife and I are two in a million. It was 2 1/2 years ago for me. The consulate (200 km away) e-mailed me the address in the USA to send it to. I did (registered mail) — not a word back, despite my inquiries in the months to follow. So all I have is a mail tracker screen shot to show someone received it. What a mess! Plus I have theses lines from a CRA FAQ (subject to change I’m sure):
I hold a U.S. green card. How does this affect my tax residency?
If you are a green card holder (that is, a lawful permanent resident of the U.S.), the U.S. considers you to be a U.S. resident.
However, if you are a resident of Canada for tax purposes and do not hold U.S. citizenship, you should not identify yourself as a U.S. person to your Canadian financial institution.
“I equated GC as a legal visitors pass.” — Me too. When the card arrived I wasn’t sure it was actually one of those things I’d heard about (green cards) because it wasn’t exactly green. It said RESIDENT ALIEN at the top and that made me feel like a visitor with permission. I had no intention, EVER, of becoming a US citizen. I just wanted to be with my new husband. We obviously picked the wrong country to start our lives together. 🙁
My commiserations to both Gordion’s wife and USFP and his family. What do we do now?
@Eric, They don’t presume that naturalized citizens don’t leave the country. The emigration estimate (15-20%) is a percentage of all people who ever received a green card, which includes people who left while still having the green card but also those who left as naturalized citizens. In fact, I suppose that many if not most emigrants naturalize before they leave, representing many of those 0.5 million you are missing. Eduardo Saverin is an example, and I personally know others.
@EmBee, @Gordian, If you want to verify that USCIS received your form I-407, you can file a FOIA request asking for a copy of the form you sent. They tend to respond in less than a month.
Also, from what I understand, it is possible to file a late form I-407 and consider the date of termination of residence, including for tax purposes, as the day the person left the US, even if the form is filed years later. The rule that citizenship for tax purposes only ends when the person actually informs the embassy/consulate of a relinquishment, even if occured years before, doesn’t apply to those with green cards (it also doesn’t seem to apply to people who relinquished before 2004). So I wouldn’t say that green card holders who leave the US permanently but still have the actual card (no longer valid) are necessarily US persons, there are potential nonresident aliens. And the procedure to end US person status for them can be done by mail and there is no fee.
We fight like heck… every dime we made was off the sweat of our brows… we went without to save & invest… we are not going to stand & give it to them with a pretty bow on it… oh… heck no… they will have to pry every dime out of me before I do that. We were frigging guests… we paid what we owed when we made it there.. The only way we can fight back is to fund this litigation in Canada… Our gov’t has turned their backs on us but as citizens… we have rights…. we didn’t have any representation in the US… but we sure as heck will demand our due in our citizen country… To our gov’t reps who stated… Congress has spoken… guess what… we have no congress but if u feel like we do… u need to find another job…
@ Shadow Raider
Thank you so much for this new information. When I sent my I-407 I filled in the date I left as my Date of Abandonment (1994) and sent an attached explanation. Maybe there’s some hope yet. I was afraid to bring any more US attention to myself by pursuing this any further but now I might at least try a FOIA. One worries how much information is swapped between the agencies down there is all.
@ EmBee If you could prove they lost it that would feel good, right!?
@ Shadow Raider. Thanks for the Info. Like EmBee I am tempted to let sleeping dogs lie. What if it turns out they didn’t receive it . . . it was lost in the mail . . . or lost at the consulate. Then what? The green card was sent, so we can’t try again, no proof we sent it apart from evidence similar to EmBee. (I took a photo of the actual filled-in form and the addressed envelope, which had a reciever-sign attachment that would normally be signed like a registered letter and the stub sent back to me. Nothing came back. I have only lost one other item in the mail in the 55 years, off and on, that I have lived in Australia.)
I have to correct what I wrote earlier. It seems that for tax purposes, the date of termination of residence is the date when the person files form I-407. I thought it could be retroactive because the law isn’t clear about it, but I just found out that the regulations specify it:
I think now I understood. The termination of residence for tax purposes could be retroactive before 2004, just like relinquishment of citizenship. Before 2004, the instructions of form 8854 said that the date of termination was the date in field 6c of form I-407, which the applicant specifies. After 2004, the instructions say that the date of termination is the date that form I-407 is filed. So an immigrant who left the US permanently after 2004 is considered a US tax resident until filing form I-407.
The question remains regarding an immigrant who left before 2004 but files form I-407 after 2004. I imagine that in this case it can be retroactive, like relinquishment of citizenship, but I’m not sure.
@ Any idea when the requirement for filing the I-407 or any other form to cancel a Green Card came into being? Was there any requirement for those card holders (expired or current) leaving the US in the 1960s, 1970s 1980s?
@ Shadow Raider
At least I have something to show a bank, if I’m ever questioned. I’ve got copies of my I-407 filing plus a proof of mailing and tracker receipt. None of this helps with the IRS though — they have my SS number and they know where I live.